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Neil Gorsuch sides with big business, big donors and big bosses

His record shows he probably won't help rein in corporate power.

His record shows he probably won't help rein in corporate power.

by Zephyr Teachoutby Zephyr TeachoutFebruary 21, 2017

Zephyr Teachout is an associate professor of law at Fordham University.

One of the most important questions for analyzing a potential Supreme Court justice is how he or she understands economic and political power: Who should govern? How should power be distributed in a society? In the case of Neil Gorsuch, the federal appeals judge President Trump has nominated for the high court, the answers are troubling. Gorsuch’s record on the bench reveals a man with a strong top-down streak, a preference for concentrated wealth and power. He has consistently been the friend of big business and monopolies at the expense of competition and open markets, and the friend of big donors at the expense of small donors. In disputes between the employee and employer, he sides with the boss.

How judges interpret antitrust law is especially important in understanding their approach to the relationship between economic and political power. It tells you a lot about what they think counts as fair and free competition between citizens. It also teaches us whether they understand markets as institutions — formed through rules and subject to public governance — or instead as some mythic set of natural forces, beyond our control.

Big antitrust cases, although rare, can reshape our entire economy. When the late justice Antonin Scalia was questioned about antitrust during his confirmation hearings for the Supreme Court in 1986, he joked that he never understood antitrust in law school and “later found out … that I should not have understood it because it did not make any sense.”

The joke was on American democracy: Scalia proceeded to undermine basic tenets of competition law for the next 30 years. In Verizon v. Trinko, he narrowed the scope of the Sherman Antitrust Act when his majority opinion held that Verizon’s alleged failure to share its network as required by the Telecommunications Act of 1996 didn’t constitute an antitrust violation. Although the holding of Trinko was narrow, its logic was broad, and the ruling had a chilling effect on prosecutions. Trinko is part of the reason a handful of big companies now dominate U.S. markets for cable, drugs, hospital beds, seeds, eyeglasses, office supplies, milk, beer and books.

Antitrust law is quasi-constitutional: The founding federal documents, like the Sherman Act, are spare. Section 2 of the Sherman Act declares simply: “Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a felony.”

In the 137 years since Congress passed the Sherman Act, two sharply different philosophies have emerged as to the purpose and meaning of these words.

Our great democratic justices understood the Sherman Act as a “charter of liberty.” They required that the nation protect the freedom of the independent business owner and an open marketplace and prosecute those people who sought to dominate other people or the political system. Justices such as Louis Brandeis believed that it was vital to use antitrust law to distribute power and opportunity as widely as possible in society, because excessive concentrations of power threatened our personal liberties and our democracy itself.

Our anti-democratic justices, such as Scalia and the other students of the Chicago School’s “law and economics” philosophy, have promoted a view of antitrust law that allows the rich and powerful to do whatever they will to the independent businessman and farmer, and for the few to exercise political control over the many. They hold that, in political economics at least, might is right.

The economic ideology of the next Supreme Court justice matters particularly today because the United States — as a growing body of evidence confirms — faces a crisis of concentrated economic and political power. This crisis is affecting our politics, as a growing number of Americans think that the profits from the labor of many are unfairly taken by a wealthy few.

President Trump spoke to that anger when he promised, during his campaign, to take on abuses by Amazon (whose chief executive, Jeffrey P. Bezos, owns The Washington Post), block the AT&T-Time Warner merger and break up big banks. His promises may prove meaningless. Indeed, his choice of Gorsuch indicates that Trump actually intends to further promote this dangerous concentration of power in the United States.

Gorsuch is an authority on this subject. He has long taught antitrust law at the University of Colorado, and as a judge, he has written decisions in antitrust cases. His record shows that he is a strict follower of the formalistic theories of Chicago School economics and willfully ignores the realities of how markets and economic power work. Put into practice, Gorsuch’s theories will make the nation more unequal and less free.

On antitrust, Gorsuch has repeatedly blessed actions by big firms to exploit their dominant position. His rulings reveal a tendency to reward concentration of private power and to enfeeble the laws and public institutions tasked with keeping the economy open and competitive. In Novell v. Microsoft and in Four Corners Nephrology Associates P.C. v. Mercy Medical Center of Durango, Gorsuch found no antitrust violations despite substantial evidence that a dominant player used its power to push out rivals.

In the Novell case, Novell presented evidence that Microsoft pulled a bait-and-switch on a competitor for no reason other than to push the competitor out of the market, and 11 out of 12 jurors found Microsoft guilty. But the case was dismissed, and Gorsuch upheld the dismissal. He wrote that “antitrust laws don’t turn private parties into bounty hunters entitled to a windfall anytime they can ferret out anticompetitive conduct lurking somewhere in the marketplace.” That sounds eloquent. But its implications are immense. Gorsuch elevated the writings of conservative academics above the congressional intent underpinning antitrust law. He concluded that a monopolist’s predatory conduct is not an antitrust violation, except under extraordinary circumstances. In practice, Gorsuch’s opinion gives monopolists virtual carte blanche to perpetuate their dominance through unfair means, regardless of the consequences for consumers, competitors and citizens.

In corruption law, Gorsuch’s record is equally dismal. In a concurrence to a decision on campaign finance in 2014, he suggested that donating to a politician is a “fundamental” right that ought to be afforded the highest form of constitutional protection, which is known as “strict scrutiny review,” more protected even than the right to vote (which is not afforded “strict scrutiny”). This matters because Gorsuch could vote to strike down the existing limits of $2,700 per person for a federal candidate, allowing unlimited personal and corporate direct donations to candidates. Wealthy donors and corporations, already too powerful, would then be legally allowed to directly scheme with candidates and dictate policy and campaign strategy. This approach flies in the face of public opinion, since polling suggests that the vast majority of voters want the Supreme Court to limit the influence of big money in politics.

A Gorsuch economy will look even more monopolized and unfair than the one we have today. A Gorsuch democracy won’t look much like a democracy at all, with donors allowed essentially unlimited avenues for influence.

Gorsuch’s views on antitrust and campaign finance go hand in hand. They reveal a judge who will further open the way for a few wealthy people to rob the American people of their basic freedoms and properties, and to subvert our democracy once and for all.

Zephyr Teachout is an associate professor of law at Fordham University.